Swedish Match builds its portfolio in US

Fri, Feb 11, 2000 06:12 CET

Swedish Match builds its portfolio in US smokeless tobacco: Purchases
Beech-nut and other brands
* Swedish Match to acquire National Tobacco chewing tobacco brands,
including Beech-nut
* Purchase limited to brands, formulations, and inventory
* Synergies are expected in both production and sales
* Positive effect on both earnings per share and cash flow
Swedish Match announced today that they have entered into a definitive
Asset Purchase Agreement with National Tobacco Company, L.P. Swedish Match
will provide $165 million for the purchase of National Tobacco's chewing
tobacco brands and formulations along with the existing chewing tobacco
inventory. National Tobacco's primary chewing tobacco brand is Beech-nut.
Other brands include Durango, Trophy, and Havana Blossom.
The National Tobacco chewing tobacco business, with annual sales of
approximately $50 million, will be fully integrated into the existing
Swedish Match production and sales/distribution network, improving Swedish
Match operational efficiency. The integration of Beech-nut and other
National Tobacco brands into the Swedish Match sales and distribution
network in the United States is expected to bring added sales
opportunities.
"This purchase of the National Tobacco chewing tobacco brands adds to our
portfolio one of America's oldest and well respected chewing tobacco
brands, Beech-nut," said Lennart Sundén, Swedish Match President and CEO.
"In addition, this acquisition will improve our production efficiency in a
category that has recently experienced excess capacity. We will be able to
ensure solid distribution and focus on these fine brands in one of our
major market segments. Due to improved capacity utilization, and enhanced
US distribution benefits, we expect to see improvement in both our
earnings per share and cash flow." Swedish Match 2001 earnings per share
are expected to improve by SEK 0.10 - 0.13.
The transaction is subject to regulatory approvals, and other customary
conditions.
Merrill Lynch represented Swedish Match in connection with the
transaction.
Swedish Match is an international group with headquarters in Stockholm,
Sweden. The company manufactures a broad range of tobacco products,
matches and disposable lighters which are sold in approximately 140
countries. Sales for the twelve month period ending December 31, 1999
amounted to approximately 9,400 MSEK. Swedish Match is listed on Stockholm
Stock Exchange (SWMA) and on NASDAQ (SWMAY).
FORWARD LOOKING STATEMENTS: Certain matters discussed within this press
release may constitute forward-looking statements as that term is defined
in the Private Securities Litigation Reform Act of 1995. Although
management believes that its financial expectations are based on
reasonable assumptions, it can give no assurance that its expectations
will be achieved. The following factors, among others, could cause the
Company's financial performance to differ materially from that expressed
in such statements: (1) changes in consumer preferences resulting in a
decline in the demand for and consumption of chewing tobacco, (2) an
increase in the price of raw materials, (3) additional governmental
regulation of tobacco or further tobacco litigation, and (4) enactment of
new or significant increases in existing excise taxes.
For further information, please contact:
Lennart Sundén, President and Chief Executive Officer
office +46 8 658 01 75
Sven Hindrikes, Executive Vice President and Chief Financial Officer
office +46 8 658 02 82 mobile +46 70 567 41 76
Bo Aulin, Senior Vice President, Secretary and General Counsel
office +46 8 658 03 64 mobile +46 70 558 03 64
Emmett Harrison, Vice President, Investor Relations
office +46 8 658 01 73 mobile +46 70 938 01 73
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About Us

Swedish Match develops, manufactures, and sells quality products with market-leading brands. Swedish Match’s product areas are Snus and moist snuff, Other tobacco products (cigars and chewing tobacco), Lights (matches, lighters, and complementary products), and Other operations. Production is located in six countries, with sales concentrated in Scandinavia and the US. The Swedish Match share is listed on Nasdaq Stockholm (SWMA).
Swedish Match’s vision is a world without cigarettes. Some of its well-known brands include: General, Longhorn, White Owl, Red Man, Fiat Lux, and Cricket.